Alan Mak: Conservatives understand Britain still needs face-to-face banking

Alan Mak MP is a former Treasury and Business Minister and Conservative MP for Havant.

The last Conservative government protected access to cash, helping small business owners, older people and others who struggle to bank online. Now, we must secure more access to face-to-face banking. High streets have changed massively over the last decade. Since 2015, over 6,600 bank branches have shut – some places have lost 90 per cent of theirs. Nearly 50 constituencies have zero branches left, and more than 90 are down to just one.

For many people, that is not just an inconvenience. It has meant losing the ability to bank at all. In coastal and rural communities like Hayling Island and small towns such as Emsworth in my constituency, if you can’t bank online and can’t easily get elsewhere, you’re cut off. This is not an abstract policy problem. It hits the everyday life of real people hard.

The Conservatives took an important and necessary step to address this before the last election. Through the Financial Services and Markets Act 2023, which I sat on the Bill Committee for in Parliament, we placed access to cash on a statutory footing and supported the rollout of shared Banking Hubs. That was the right approach. It is already making a difference. LINK, the organisation that assesses where Hubs are needed, has carried out over 1,600 community assessments, leading to 276 Banking Hubs being recommended and delivered. But the current framework does not go far enough. It defines the problem too narrowly.

Today, the system is designed to ensure access to cash. But access to cash is not the same as access to banking, especially face-to-face banking. Being able to withdraw or deposit money is only part of what people need. Banking is also about resolving a blocked card, fixing a failed payment, getting help after fraud, or simply speaking to someone for advice or when something has gone wrong. These are not edge cases. They are everyday realities that MPs encounter from constituents all the time. For example, there are now over 3 million cases of banking and payment fraud each year, and around 70 per cent begin online. When something goes wrong, being able to speak to someone face-to-face can make the difference between stopping fraud early and losing life savings.

Nor is this a marginal issue. The FCA’s Financial Lives Survey shows that around 3.3 million people in the UK do not use online banking. More broadly, a significant minority still rely on physical services: around a quarter of people use cash frequently, and among those who are digitally excluded, that figure is even higher. The current rules do not reflect this reality. Under the existing system, communities are often judged to have sufficient provision if there is a Post Office or cash machine within one kilometre.

Of course, post offices play a vital role in providing access to cash and already form part of the solution because they operate banking hubs, separate from post office branches. But while they can facilitate access, they do not replace the full range of face-to-face banking services people rely on. As a result, too many communities fall through the cracks. They may have access to cash, but not access to banking.

This is not a failure of the model. Banking hubs are working. It is a gap in the design, which now needs to evolve to meet changing needs. That’s why I am introducing the In-Person Banking Services Bill in Parliament. My Bill will build on the success of the existing framework by placing access to face-to-face banking services on a statutory footing for the first time. It would ensure that decisions by LINK about where hubs are needed reflect access to banking services, not just cash. The Bill’s aspiration is to ensure every town or village with a population over 10,000 is eligible for face-to-face banking services through a banking hub.

The Bill is supported by AgeUK and Which? the consumer rights group, plus senior MPs including former Chancellor Sir Jeremy Hunt, former Chief Secretary to the Treasury Laura Trott MP, former City Minister John Glen MP and current Shadow Business Secretary Andrew Griffith MP in his constituency MP capacity. Other Conservative MPs from across the country are also backing the Bill.

This is not about turning back the clock. I am a strong supporter of online banking, the wider digitisation of financial services, and indeed the UK being a leader in technology and innovation. Digital banking works well for many and will continue to do so, and most young/ working-age people rarely go into a bank branch or a hub. But a modern financial system must work for all its users, not just the majority. Older people, small business owners, people in rural, suburban and coastal communities and the digitally excluded also need access to the banking system. UK Finance, the trade body for banks, who I consulted when developing the Bill, accept this.

The Conservatives were right to act to protect access to cash. Now we must go further and secure access to face-to-face banking. Because no one should be excluded from managing their own money simply because they cannot do it online.